CHAPTER TEN E-COMMERCE: DIGITAL MARKETS AND DIGITAL GOODS

Objectives Unique Features of e-commerce Business and revenue models Transforming marketing Transforming business-to-business transactions Challenges

E-Commeerce Growth The growth is both obvious and staggering Online sales growing double-digits year over year Number of individuals shopping online expanding Sheer number of people online

Transformations We no longer just buy things, we engage Yelp reviews, Facebook, chats We move from the desktop to the tablet and phone A mobile presence is almost a requirement

E-Commerce vs. Brick and Mortar It’s an ubiquitous 24x7 logical place to procure goods a services Increase availability Decrease transaction cost Everyone has global reach Increases richness Pull and push driven interactivity

E-Commerce vs. Brick and Mortar Information density increases Think about what you can discover about a product Near complete price transparency The Web is personalized And of course all the social content Information symmetry We all have access to the same information It’s no longer business-centric

E-Commerce vs. Brick and Mortar Disintermediation We remove more and more steps from the value chain thereby removing cost Organizations flatten From physical goods to digital goods Music (disrupted) Video (disrupted) Newspaper (disrupted) Software distribution (?)

Types of E-Commerce Business-to-consumer E-bay Business-to-business Alibaba Consumer-to-consumer E-bay / Craigslist M-commerce

Business Models My List differs from your book’s a bit We have been thru most of these already

Ebusiness Stratigies (Sales) It began with direct selling Pure-play retailing Dell / Gateway / Amazon Multichannel retailing JC Penney moves catalog sales to the Internet Expanding reach That little bed and breakfast in Napa

Ebusiness Strategies (Marketing) Popup and other ads RSS – You don’t ask for the data, you just get it How does Google make money? How does Facebook make money?

Ebusiness Stratigies (Financial) Online financial services has seen explosive growth Banking / stocks Online exchanges New industries have emerged PayPal The U.S is quite behind in micropayments

Ebusiness Stratigies (Procurement) It’s now much easier to buy common business items Office supplies / etc B to B exchanges

Ebusiness Strategies (Customer Service) Self-service customer service tools Get current interest rates online Get product information online Repair manuals Electronic funds transfer

Ebusiness (Intermediaries) Match buyers (consumers) and sellers (producers) in new ways Create new markets (Ebay) (Match.com) (AliBaba.com) Aggregate and disseminate content (wsj.com, CNBC) Infomediaries (Web MD) The distinction gets blurry and the roles are not mutually exclusive

Ebusiness (Social Media) LinkedIn for business contacts Here is a non-canonical list _social_networking_websites#A _social_networking_websites#A

Ebusiness Metrics (targeting) This is all behavioral targeting Click-through tracking Users clicked on a Web site ad for further information Web site pattern usage How users navigate from page to page Per page view times Completed shopping cart transactions

Tracking Web Site Visitors Unidentified We know what you do but not who your are Tracked with cookie We know what you do and verify uniqueness but not identity Identified / Authenticated We know who you are and everything you do?

Social E-commerce Based on a social graph We have friends with similar interests So we consume similar goods and services And Facebook knows this. Social shopping Pinterest Houzz Croudsouring

Electronic Data Interchange (EDI) Your book does not really talk about this much EDI automates nearly all common transactions Purchase orders / invoices / payments / etc… Very complex to implement creating a barrier to entry

Electronic Data Interchange (Implementation) There are transaction sets for finance, government, transportation, health care, supply chain A transaction set defines the rules for a common business transaction

Electronic Data Interchange (Implementation) Made up of data elements, segments and envelopes

New Ways to Procure Private industrial networks Customers link to a supplier Network marketplaces Amazon to some degree Provide long-term purchasing contracts Private exchanges

M-Commerce Location-based services Geoadvertisting Geoinformation

Ebusiness Challanges International ecommerce laws don’t exist or are not enforceable Security and trust Taxation Monetization of services